Perception Gap

Behind the recent skirmishes between China and America—the latest surrounding the Dalai Lama’s visit to the U.S.—lies a wide divide between the two nations over how they see themselves, each other and their place in the world.

The U.S. prefers China to be like Japan: economically powerful and politically cooperative but strategically dormant and militarily inhibited. Knowing that this was never realistic, the second best outcome for Washington—captured succinctly in a 2005 speech by the then U.S. Deputy Secretary of State and current World Bank president Robert Zoellick—would be for China to demonstrate it is a “responsible stakeholder.” America would ensure that China benefits from the global system of international rules and laws developed since World War II and institutions like the World Trade Organization. In return, having acquired a stake in this system, China would realize that it is in its own enduring interest to support the pre-existing global order.

This approach is not only designed to preserve the peace. It is also intended to be transformative. As with other East Asian success stories, the U.S. expects that further economic liberalization will bring prosperity, and that this will gradually bring political reform to China and domestic respect for human rights.

But American faith in the transformative power of China’s economic rise might be misplaced. Capitalism with Chinese characteristics places far more power and wealth in the hands of the state sector than what has ever occurred in countries such as Japan and South Korea. Beijing is nurturing state-owned champions to dominate domestic markets and crowd out the private sector in order for the Chinese Communist Party (CCP) to keep its economic relevance, privileged status in Chinese society and hands on the country’s wealth. This means the CCP does not believe sweeping economic, much less political, liberalization is required for China’s continued rise, let alone that it constitutes the endgame.

Then there is the issue of size and China’s past greatness. Washington assumes that China’s destiny is plastic. Yet, to the CCP, it is predetermined. China is home to four-fifths of the population of East Asia and has 21/2 times more people than the whole of Southeast Asia. It has been the dominant civilization in Asia for 3,000 years and has had the largest economy in the world for 18 of the past 20 centuries. For a country that views its natural place at the center of Asia, expectations that it behave as a responsible stakeholder merely perpetuate a regional hierarchy that places China beneath the (relatively) recent American interloper.

Washington seeks the perpetuation of Pax Americana, a liberal peace underwritten by American power in Asia, despite the re-emergence of the world’s most populous country. The U.S. wants the endgame in China to resemble the rest of East Asia—genuinely believing that this will ultimately achieve lasting stability and mutual prosperity—and complains that China remains an insular, self-interested and subversive beneficiary of the system.

The CCP sees it differently. In leading one-fifth of the world’s population toward greater prosperity, China is creating its own paradigm that borrows freely, but stands apart, from the East Asian model of development, let alone Western approaches. Therefore, foreign criticisms about poor progress in economic and political reforms do not apply. Moreover, Pax Americana in Asia has been an aberration in existence for only six decades. In contrast, in Beijing’s view, the return of the Chinese civilization-state simply restores Asia’s natural order.

Few would want to deny what China’s leaders since Mao Zedong have termed China’s return to “dignity,” a reference to the country’s re-emergence as a great power in Asia. But even though other Asian states welcome economic opportunities offered by China’s rise, the vast majority prefer the preservation of Pax Americana. The American-backed order has hitherto offered protection for smaller players by binding more powerful states (including the U.S. itself) to agreed rules of behavior and processes of dispute resolution.

Asian states worry that an alternative order based on the superiority of the Chinese civilization will eventually become hierarchical. A still insecure and internally weak China has largely pursued win-win economic relationships to appease a nervous region. But if its domestic example is anything to go by—where the authority of the CCP to wield power and control resources is absolute and dissent is harshly treated—a dominant Middle Kingdom might show little future restraint in the relentless quest to enhance China’s national power.